nep-mfd New Economics Papers
on Microfinance
Issue of 2017‒03‒19
two papers chosen by
Aastha Pudasainee and Olivier Dagnelie

  1. Does Microcredit Reduce Gender Gap in Employment? An Application of Decomposition Analysis to Egypt By Mohamed El Hedi Arouri; Nguyen Viet Cuong
  2. USDA Microloans for Farmers: Participation Patterns and Effects of Outreach By Tulman, Sarah; Williams, Robert; Higgins, Nathaniel; Gerling, Michael; Dodson, Charles; McWilliams, Bruce

  1. By: Mohamed El Hedi Arouri (Université d'Auvergne & EDHEC Business School, France); Nguyen Viet Cuong
    Abstract: In this paper, we examine the impact of microcredit on labor supply of men and women and subsequently investigate whether microcredit can reduce employment gap between men and women in Egypt. Overall, we show no significant effects of microcredit on labor supply of men. Yet, we find a strong effect on employment of women aged 22 to 65. Borrowing from a microcredit source increases the probability of working for women by 0.071. Since the proportion of working of women was around 2.1%, it implies microcredit can increase the proportion of working of women by around 30 percent. Using decomposition analysis, we find that micro-credit can reduce the employment gap between men and women by 0.43 percentage points. If 20 percent of women obtain microcredit, the employment gap between men and women would be decreased by 4.3 percentage points.
    Date: 2016–06
  2. By: Tulman, Sarah; Williams, Robert; Higgins, Nathaniel; Gerling, Michael; Dodson, Charles; McWilliams, Bruce
    Abstract: The U.S. Department of Agriculture, Farm Service Agency’s (FSA) Microloan program, launched in January 2013, aims to better serve the credit needs of small farms, beginning farmers and ranchers, veterans, and farmers from historically socially disadvantaged groups (women and minorities). These loans are designed to be more convenient and accessible to nontraditional producers, with a shortened and streamlined application and relaxed criteria for managerial experience, production history, and collateral. Using FSA’s direct loan data to examine Microloan uptake patterns, ERS researchers find that, compared with Microloan-sized traditional Direct Operating Loans, (1) a larger share of Microloans have gone to the targeted groups, and (2) Microloans have attracted a larger number and higher share of borrowers who are new to FSA direct loans. Also, an experiment to test the effectiveness of targeted outreach to farmers proved effective within the States that were included in the experiment: significantly more farmers received Microloans in ZIP Codes that had received the informational letters versus those in ZIP Codes that had not.
    Keywords: Farm Service Agency, Microloan, credit awareness, Direct Operating Loan, women, minority, disadvantaged, veteran, new borrower, outreach, uptake, targeted groups, Agricultural Finance, Institutional and Behavioral Economics,
    Date: 2016–12

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